How Green Was the Valley

In July 1999--before the pink-slip parties, before bulls became bears and Yahoo pulled the plug here on its flashing freeway sign--five faces from the Digital Revolution appeared on a now-famous Wired magazine cover. The oldest was a scant 35.

Two were tech CEOs, one was in dot-com advertising, one claimed his work had “historical implications,” one had become a minor celebrity chronicling the culture of the Internet. Four wore black. All struck that “deal with it” pose that then was obligatory in reports on Silicon Valley. This was no ordinary gold rush, the cover implied, no mere act of mass mania. This was bigger. This was historic. The quintet, in the months to come, would become poster children for all the best hopes of this moment. “Generation Equity,” the cover story trumpeted.

Less than two years later, history is revising its take on the revolution. To the extent that “Generation Equity” comes up, it’s in gleeful reports that it has crawled back to school or back to “real” jobs or back home. The new economy its members fueled, the one that was supposed to have boomed forever, is dismissed on good days as a naive delusion; on bad days, it’s a “classic bubble” or an elaborate con job.

What became of those five poster children, though, conveys a more complex picture and helps illustrate why so many here at ground zero of the tech wreckage insist that, for all the diminished expectations, the new economy mustn’t be written off yet. Though some on that old Wired cover got far less than they’d hoped for, and some failed to get rich despite almost comically close encounters with easy money, none has retreated to some chastened, old-economy version of his or her old dreams. Four remain in or near Silicon Valley, and the fifth has bet his career, fortune and best hopes on tech.

Julie Blaustein, a salesman’s daughter, was the sole woman on the cover. She’d come West from Boston, willing to do any job just to break into the world of tech. Beside her in the back row was Thierry Levy, a software entrepreneur who had fled to Silicon Valley because it was too hard for the son of a poor man to become rich in his native France. Ben Chiu, at far right, had just become a 27-year-old multimillionaire by selling his price-comparison shopping engine to a big media Web site. Scott Krause’s yen for history-making work had led him to leave a start-up months before it went public, enriching his ex-colleagues.

And finally, front and center, in the off-black T-shirt, there was Po Bronson, the rising star of the digerati who’d adapted his latest Silicon Valley book for this exclusive. Magazines don’t usually put writers on covers, but Wired’s style was more Rolling Stone than Fortune, and the tech hype had a way of making everything it touched, then, into a part of its story. Also, there was the matter of Bronson’s cheekbones, which had prompted one Web site to devote an entire fan page to the accomplished writer, titled “Perpetual Po.”

That’s who they were then, when Bronson wrote his poignant introduction:

By car, by plane, they come. They’re just showing up. They’re giving up their lives elsewhere to be here. They come for the tremendous opportunity, believing that in no other place in the world right now can one person accomplish so much with talent, initiative and a good idea. . . .

They come too because what they see ahead of them, if they stay behind instead, is a working life that seems fundamentally and unavoidably boring. Nothing seems worse than the fate of boringness.

They keep finding themselves saying, “What the hell am I doing with my life?”

The sun has come out between downpours in San Francisco, and Julie Blaustein has agreed to take a study break. It has been less than a month since she quit her last job, trying to sell search engines in the floundering dot-com market. Her mind now is on the GMATs. At 33, she’s decided it’s a good time to get a business degree.

She grabs a table at Ella’s restaurant, near her Pacific Heights-adjacent apartment. She shrugs off her leather jacket. She walked here. There was a time when this alone would have felt like an accomplishment. She and a friend had camped their way across the country in 1997 to get to this city, dreaming of great Silicon Valley paydays and cool San Francisco apartments. The most they’d been able to afford had been suburban Burlingame.

She had given up a career in medical conference planning to come here. She didn’t even own a computer. In college, she’d feared technology. But there had been a telemarketing stint at Lotus Development, the software company, after college, and nothing since had been as new or as thrilling. So what if she was lonely and lacked expertise and had to sign on at the public library? “I was temping at Cisco when I met Po Bronson,” she confesses, laughing. “I had read his [earlier Silicon Valley] novel, and his e-mail address and Web site were on the back. I wanted to let him know how his book had touched me. And I just felt so stranded. And his book-jacket photo was pretty cute.”

Bronson, who was already researching his next book, decided Blaustein might be a good source for it. They became friends, and he was “like a big brother,” she says, as he kept track of her career. By mid-1999, the company for whom she was selling online ads had been bought by Yahoo. When the sale was complete, she was laid off, but her options had vested. She finally got that cool San Francisco apartment. When the Wired cover hit the stands, strangers e-mailed her.

She went abroad, and when she returned, the city was riddled with dot-com launch parties. One featured Palm Pilots as party favors. One had a Porsche as a door prize. Her stock windfall meant that she could hold out for the right job. She didn’t start seriously job-hunting for months.

It was March 2000--the start of the shakeout--when she signed on to sell search engines for an East Coast company whose founder was 18. The product was almost ready for market. Her job was to find clients. First, they were eager, then less so, then it was August, and suddenly all new purchases needed clearance from the board of directors. Then it was October and the engine was ready--just in time for the market to disappear.

“I’d had about 15 companies that I thought I could count on,” she remembers. “By December, only about seven were strong. About five of them just went out of business on me. You’d just get this e-mail announcing they were just no longer, you know, around.”

She found herself wondering whether sales was for her, really. “I thought I’d wanted to be like my dad,” she says now, picking at her salad. “He was a really successful salesman. Really great. He died when I was 21. And sales is a really great skill to have. But I’m not, like, totally aggressive. Maybe going back to school is part of the process of discovering what I really want.”

She plans to use her degree to get a job in e-commerce--which she believes will rise again when the economy rebounds. “I feel like I was part of, like, a time,” she says. “Like the ‘60s. And the opportunity is still here, even if the energy is, maybe, gone.”

Arriving With

a Single Suitcase

Thierry Levy, the Frenchman, still has the dark goatee and little glasses he wore in the cover picture. And against all odds, he still has his software company. “I thought it was going to be difficult, but it has been worse than I had ever imagined,” the chief executive sighs, perched on a chair in his one-bedroom San Mateo apartment. “I thought I’d make it in three years.”

Computer wires crisscross the doorway; the kitchen is the size of a closet. It’s better than the $1,050-a-month converted garage he was renting two years ago--it has heat, for example--but it’s still just a tan stucco walk-up in a stretch of Jack-in-the-Boxes and Launderlands.

He has a substantial income and could easily afford several times the $1,400 he spends in monthly rent now, but he grew up poor, and the nouveau opulence of Silicon Valley has amped his innate frugality into a kind of perverse cheapness. His French friends call him le chameau--the camel--because he could cross the Sahara without water, that’s how good the last few years have made him at self-deprivation. On first dates with American women, he now makes it a point to drive a dinged-up, ’93 Nissan instead of his newer Jeep Cherokee, just so they don’t get their hopes up. In the bedroom, a laptop is downloading obscure French music from Napster so he doesn’t have to pay for it.

Levy had come to Silicon Valley on Jan. 28, 1998, with a single suitcase. The whole coming-to-America saga was in Bronson’s Wired piece: How he’d been on his way home to France from a San Diego trade show when he’d had this thought, that this was his defining moment. That if he were to go back to Paris, he’d regret it for the rest of his life. How he landed in San Francisco at 11:10 p.m. at Gate 22 in a polo shirt and blue jeans. How he rented a Geo and sped south in the rain. How he searched for some landmark to mark his arrival and found nothing but office parks, suburbs and, finally, a room at a Days Inn with a broken TV.

In France, he said then, self-made wealth is seen as immoral. Not so in America. His product, Quiz Studio--a software that allowed Web developers to add questionnaires to Web pages and to build Web tests--seemed both commercially and socially redeeming. His plan was to round up some investors and get rich.

But the venture capitalists passed on him; though Quiz Studio had broad educational uses, his project was always too big or too small. When Wired left him, he had six months’ worth of money from one of his original French investors and was talking about selling the business. “For months,” Levy says, “we were in a bad financial situation. The buzzword was ‘e-commerce.’ If you couldn’t repeat the word ‘e-commerce’ 10 times in your pitch, you had no chance of being funded at all.”

Living in Silicon Valley during the heyday of EToys and Pets.com and other now-fallen comers “was absolute torture. I’d see all these e-commerce guys at Round Zero [a Silicon Valley club for tech entrepreneurs] boasting about how intelligent they were, and how much money they’d raised and how they were going to take over the world.” The monthly meetings of the exclusive group would leave him inwardly seething at what seemed to him to be the near-fraudulent hyping of unproven business plans.

Finally, in September 1999, a big tutoring company bought partial rights to his technology “for a fraction of what we should have gotten, but it was that or dying, so we sold.” He kept shopping for venture capital, but none was forthcoming. Then came the big tech crash in March 2000. It became clear then, he says, that Quiz Studio would never be funded. The sole upside was that he wouldn’t be annoyed anymore by e-commerce blowhards: After the crash, he says, “attendance at Round Zero was down 60%.”

Levy and his three employees started moonlighting, lucratively, as consultants. He splurged on a Rolex, the better to impress possible investors in what was left of Quiz Studio. The thrift that friends had mocked in boom times now looked like foresight. He got a new girlfriend. Quiz Studio caught the eye of some bigger players. “We’re in negotiations with three companies specializing in e-learning,” he says now, “and may close sale of our company within the next few months.”

If it finally happens for him, he won’t walk away with the millions he’d dreamed of on that rainy night in that rented Geo. “It’s not 1999 anymore,” he sighs. Still, he won’t leave the tech world. He can’t afford to. “I want to get married,” he says wistfully, a print of Picasso’s “The Dream” on the wall beside him. “Silicon Valley is the loneliest place on the planet, and love is the one thing your MasterCard cannot buy.”

A Firm Belief in

Luck and Fortune

Ben Chiu, the multimillionaire, was born in Taiwan and raised in Toronto. After making his fortune in Silicon Valley, he moved to Hong Kong. When he was working 18 hours a day, seven days a week, building a start-up from nothing in the flats of Fremont, he “was not very superstitious.”

Now, he says--in an e-mail from his ample condominium in one of the world’s great cities--he pores over Western astrology and the Chinese zodiac and feng shui and Chinese fortunetelling. He’s studying Buddhism. (“I’ve even entertained thoughts of becoming a monk,” he offers.) Not long ago, he went to a Thai temple to pay thanks. “I believe luck and fortune are more relevant now that I have . . . more to lose.” He just turned 30, he writes, “Capricorn, born Year of the Dog.”

Chiu has been elusive. In late 1999, six months after selling his company, KillerApp Inc., to CNet, he decided to start a new company--and then disappeared. It is only after a series of e-mails to an Internet address supplied by CNet that Chiu apologetically responds, saying he’s been hip-deep in his new business, which is “in stealth mode.” He writes that, after his CNet deal closed, he visited Toronto, then bought a Bay Area ranch house on a half-acre for his parents, who by then had moved to California. In the cutthroat Silicon Valley, he says, his parents were his only friends.

“My mom regularly cooked and brought dinner to my office because she knew I was too busy to even go out to eat,” notes the only child, who has been reading “Harry Potter.” His father, he writes, let him share their rented apartment while he built KillerApp. It was a relief, he said, to finally have time for people who’d known and loved him for richer and poorer, people he didn’t have to hold “at arm’s length.”

But, writes Chiu, having time for reflection made him anxious. The sudden leisure gave him “the guilty feeling that I’m not doing my ‘homework.’ ” Also he had an idea for a new engine, which he plans to launch this spring. Because “loneliness breeds motivation for me”--and perhaps also because Asia is the new tech frontier--he again made himself a stranger in a strange place.

His fortune, upwards of $20 million at the time of the sale, has eroded, though “it’s still enough for me to spend in a lifetime.” He didn’t spend much on worldly goods; on the other hand, he says, “I don’t check prices on the menu when I eat. I try to be generous with my family and friends and help out when I can. That’s about it. I look at all the expensive toys I could buy and think of all the money I save by not buying them (i.e., no Ferrari).” He gets “disrespected a lot” by Hong Kong sales clerks, he says, because he still wears cargo pants and polo shirts with nerdy tech company logos on them.

What he has done, however, is invest in venture funds and start-ups and various tech stocks--hence the shrunken nest egg. He still has a majority of his CNet shares, which have dropped in the last year from a high of $75 to about $8 now. “One private company I invested in went bankrupt. I’ve learned my lessons,” he reports, but adds that he’s “still fascinated by dots,” meaning dot-coms.

He logs only 12-hour days in his seven-day workweek, though--that’s one change. “Obsession with a company can do strange things to a person,” he writes. He has a girlfriend now, and he exercises (“No more Pepsi binges”). And he tries, in vain, to wrap his mind around these last few years: “Not a single day passes that I’m not blown away.”

‘Who’s to Say This

Isn’t Just Temporary?’

“Who’s to say this isn’t just temporary?” Scott Krause is cheerfully asking. It is 8 p.m. on a starry night in Redwood City, and the MBA who wanted to make history is still at his desk. No cause for complaint there--just having a desk is a good thing these days. In the lifetime since Krause last spoke for tech’s future, the Nasdaq has lost two-thirds of its value, and more than 60,000 new economy workers have been laid off. So many young, educated people are unemployed here that job fairs have been sponsored by everyone from local rock stations to cafes in the Castro. The tech world, however, is no place for nonbelievers. Thus, its unofficial mantra is what Krause, now 29, is about to say: “Tech is going to be around forever. It was over-hype a couple of years ago when magazines like Fortune said the Internet was going to change the world, and it’s over-hype now when people say the whole economy is crashing. Who’s to say things aren’t going to get better next year?”

It’s the sort of optimism that prompted Bronson, two years ago, to wonder whether someone hadn’t “put Prozac in the pizza” at Krause’s office. “A modern-day Hardy Boy,” the writer called him. But Krause, a clean-cut guy who grew up in Massachusetts and got his business degree from the University of Tennessee, seemed, more than the others, to have a handle on the question Bronson said he kept hearing. What Krause was doing with his life was: changing the world.

“If I’m going to work 70-hour weeks, I might as well do something purposeful,” Krause had said then. Thus, when his first job, a “business development” gig at an e-commerce company, turned out to be cold-calling for the telesales division, he bailed. He was sharing a one-bedroom apartment in San Francisco’s funky Mission District when his ex-employer went public. His ex-colleagues got rich without him. No matter, he’d told Bronson. He’d found a new job and was “contributing to something that has historical implications.” That job--on a project that ended up canceled--was with the San Francisco search directory Infoseek.

Infoseek was subsequently bought by Disney, allowing Krause for a time to boast of both job satisfaction and money. His Infoseek options vested, he said, in the “low- to mid-six figures.” He cashed them out and put the whole windfall into an IPO for a cool start-up. Then he left Disney to become a senior product manager at a small company that “was changing something and making a difference.”

The company was called Napster. At last count, it was scrambling to stay in business. Not unlike Webvan, the online grocer in which the entirety of Krause’s windfall remains. His shares, once worth $28 apiece, were trading for 19 cents last week. He still shares an apartment in the Mission. He tries not to think about the historical implications. “I don’t regret it at all,” the Hardy Boy says.

The Wired story was not conceived as a magazine story. It was an excerpt from “The Nudist on the Late Shift,” Bronson’s nonfiction book about life in Silicon Valley at the peak of the boom. Its emphasis was less on moguls than on ordinary dreamers. It’s one of those works, now, that people here tell you to read if you read nothing else about the digital revolution. That, and Bronson’s satirical novel, “The First $20 Million Is Always The Hardest,” set in the world of computer start-ups.

Born in Seattle, Bronson, 37, hadn’t always been a social observer. He had gotten a degree in economics at Stanford and taken a job out of college at an investment banking firm. He was miserable, he would write later, and walked away after 20 months, despite an offer from the bond department to become “a full salesman with a starting draw against a commission of $300,000.”

The sum hadn’t swayed him, he wrote, because he had “an accountant’s clinical calm around figures big and small,” a “gift” that let him transcend the human urge to “go weird around money.” He spent the next seven years earning his MFA in creative writing at San Francisco State, a contemporary of literary prodigies such as Ethan Canin. He worked for small presses to help pay the bills.

Write what you know, his teachers told him. What Bronson knew was work. That, and the power of money. His parents were divorced, he’d write later, and money was a perpetual issue:

“Mom was constantly threatening that my two brothers and I were going to eat her out of house and home, and to avoid this fate, certain foodstuffs had to be rationed . . . “ he wrote in one essay. “ On the day before my high school graduation, I learned that for two years nobody had paid the school tuition, and I wouldn’t graduate.”

“The First $20 Million” had been well-reviewed, as had his first novel, set in the world of bond traders. Hollywood had already come calling, drawn by his funny, compassionate style. In Silicon Valley, Bronson was a sort of cult figure--”The First $20 Million” had been the book that had prompted Julie Blaustein to contact him. He was making good money at the time of that Wired cover, but, he says--his “gift” notwithstanding--he had the sense that “it could all just go away.”

“When I was growing up,” he says now, sitting in his rooftop office in a downtown writer’s co-op, “my mom’s boyfriend was a writer, and he didn’t make a penny. And she had to kick him out of the house a couple of times. I loved him. I ran a small press for six years and published these books in which we’d pay esteemed writers who were down on their luck, like, $3,000 for their novels, and pay them late. There was always this sort of fear that I’d end up like one of them.”

Critics raved about “Nudist on the Late Shift.” People magazine named him the “sexiest author of 1999.” The book became a bestseller and went into multiple printings. Bronson was hauled down to Hollywood to write a TV pilot about the tech world, and then a movie script, and then a TV movie script, and then scripts for a TV series about young financiers. (Fox plans to shoot the film version of “The First $20 Million” this month.)

But Bronson--who, when not being hyped by People, is actually a married guy who writes in closets--says the people he wrote about affected him more than the attention he got from what was, by now, his third successful book.

“When Ben Chiu made it, it really changed me, as a person,” Bronson says now. “I’d wanted to write in the tradition of Didion and Steinbeck and Sinclair and reveal the cold truth of fate. I thought he’d crash and burn and the powers-that-be would manipulate the system for their own benefit. And then this Canadian Taiwanese kid with no connections came to this place and succeeded, and it made me believe more in people, and sort of stop being so sure that some Wizard of Oz was pulling the strings.”

Bronson shows up now on panels and op-ed pages as a reluctant expert on Silicon Valley. He tries to explain that he wasn’t just writing about IPOs and eyeballs on Web sites. He’s working on a new nonfiction book, drawn, like the last one, from the stories that fuel revolutions. The title is “What Should I Do With My Life?”